KENANGA MANAGED GROWTH FUND · For the Financial Period from 1 April 2015 to 30 September 2015 Investor Services Center Toll Free Line: 1 800 88 3737 Fax: +603 2057 3722 Email: [email protected]

KENANGA MANAGED GROWTH FUND

INTERIM REPORT

For the Financial Period from 1 April 2015 to 30 September 2015

Investor Services CenterToll Free Line: 1 800 88 3737Fax: +603 2057 3722Email: [email protected]

Head Office, Kuala LumpurSuite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Tel: 03-2057 3688 Fax: 03-2161 8807

Kenanga Investors Berhad (353563-P)

KENANGA MANAGED GROWTH FUND

Contents Page

Corporate Directory iiDirectory of Manager’s Offices iiiFund Information 1Manager’s Report 2-6Fund Performance 7-9Trustee’s Report 10Statement by the Manager 11Financial Statement 12-40

ii Kenanga Managed Growth Fund Interim Report

CORPORATE DIRECTORY

Private Retirement Scheme (PRS) Provider: Kenanga Investors Berhad (Company No. 353563-P)Registered office

Kenanga Investors Berhad (KIB)8th Floor, Kenanga International, Jalan Sultan Ismail,50250 Kuala Lumpur, Malaysia.Tel: 03-2162 1490 Fax: 03-2161 4990

Business OfficeSuite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Tel: 03-2057 3688 Fax: 03-2161 8807E-mail: [email protected] Website: www.KenangaInvestors.com.my

Board Of DirectorsDatuk Syed Ahmad Alwee Alsree (Chairman)Syed Zafilen Syed Alwee (Independent

Director)Peter John Rayner (Independent Director)Imran Devindran bin Abdullah (Independent

Director)Dato’ Bruce Kho Yaw HuatIsmitz Matthew De Alwis

Investment Committee Dato’ Bruce Kho Yaw Huat (Chairman) Syed Zafilen Syed Alwee (Independent

Member)Peter John Rayner (Independent Member)Imran Devindran bin Abdullah (Independent

Member)Ismitz Matthew De Alwis

Company Secretary: Norliza Abd Samad (MAICSA 7011089)9th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Tel: 03-2162 1490 Fax:03-2161 4990

Trustee: CIMB Commerce Trustee Berhad (Company No. 313031-A)Registered Office

Level 13, Menara CIMBJalan Stesen Sentral 2Kuala Lumpur Sentral50490 Kuala Lumpur.Tel: 03-2261 8888Fax: 03-2261 0099Website: www.cimb.com

Business Office Level 21, Menara CIMBJalan Stesen Sentral 2Kuala Lumpur Sentral50490 Kuala Lumpur.Tel: 03-2261 8888Fax: 03-2261 9889

Auditor: Ernst & Young (AF: 0039)Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

Tax Adviser: Ernst & Young Tax Consultants Sdn Bhd (Company No. 179793-K)Level 23A, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, 50490 Kuala Lumpur.Tel: 03-7495 8000 Fax: 03-2095 5332

Membership: Federation Of Investment Managers Malaysia (FIMM)19-06-1, 6th Floor, Wisma Tune, 19, Lorong Dungun, Damansara Heights, 50490 Kuala Lumpur, Malaysia. Tel: 03-2093 2600 Fax: 03-2093 2700 Website: www.fimm.com.my

Kenanga Managed Growth Fund Interim Report iii

DIRECTORY OF MANAGER’S OFFICES

REGIONAL BRANCH OFFICES:

Kuala LumpurSuite 12.02, 12th Floor, Kenanga InternationalJalan Sultan Ismail,50250 Kuala Lumpur, MalaysiaTel: 03-2057 3688Fax: 03-2161 8807

Johor BahruLot 11.03, 11th Floor, Menara MSC Cyberport5 Jalan Bukit Meldrum80300 Johor Bahru, JohorTel: 07-223 7505/4798 Fax: 07-223 4802

MelakaNo. 25-1 Jalan Kota Laksamana 2/17Taman Kota Laksamana Seksyen 275200 MelakaTel: 06-281 8913, 282 0518 Fax: 06-281 4286

Kuching1st Floor, No 71, Lot 7Lot 10900, Jalan Tun Jugah93350 Kuching, SarawakTel: 082-572 228 Fax: 082-572 229

KlangNo. 12 Jalan Batai Laut 3, Taman Intan41300 Klang, Selangor Darul EhsanTel:03-3341 8818, 3348 7889 Fax:03-3341 8816

Kota KinabaluA-03-11, 3rd FloorBlock A Warisan SquareJalan Tun Fuad Stephens88000 Kota Kinabalu, SabahTel: 088-447 089/448 106 Fax: 088-447 039

Penang16th Floor , Menara Boustead Penang 39, Jalan Sultan Ahmad Shah 10050 Penang. Tel : 04 227 3788 Fax : 04 210 6644

IpohSuite 1, 2nd Floor,63 Persiaran Greenhill,30450 Ipoh, Perak, MalaysiaTel: 05-254 7573/7570 Fax: 05-254 7606

Seremban 2nd Floor , No. 1D-2 Jalan Tuanku Munawir 70000 Seremban, Negeri Sembilan . Tel : 06 761 5678 Fax : 06 761 2242

Miri2nd Floor, Lot 1264,Centre Point Commercial Centre,Jalan Melayu, 98000 Miri, SarawakTel: 085-416 866Fax: 085-416 866

Kenanga Managed Growth Fund Interim Report 1

1. FUND INFORMATION

1.1 Fund Name

Kenanga Managed Growth Fund (KMGF or the Fund)

1.2 Fund Category /Type

Balanced / Income & Growth

1.3 Investment Objective

The Fund aims to achieve long-term capital growth through diversified investments inequities and bonds.

1.4 Investment Strategy

The Fund invests in a mixture of equities, bonds and money market instruments. The Fund engages active tactical allocation between asset classes with emphasis on managed growth and selects securities based on current earnings, growth prospects and potential for capital appreciation as well as income distribution. Tactical asset allocation between assets and sectors is determined by analysing the economy, which influences the business cycle, and market factors.

1.5 Duration

The Fund was launched on 23 April 2004 and it shall exist as long as it appears to the Manager and the Trustee that it is in the interests of the unit holders for it to continue.

1.6 Performance Benchmark

A composite of FTSE Bursa Malaysia 100 Index (FBM 100) (50%) and the All Malaysian Government Securities (MGS) Index (50%) obtainable from www.bursamalaysia.com and www.quantshop.com.

1.7 Distribution Policy

Income (if any) will be distributed annually on a best effort basis.

1.8 Breakdown of unit holdings of KMGF as at 30 September 2015

Size of holdings No. of unitholders No. of units held5,000 and below 371 809,9925,001 - 10,000 102 720,09410,001-50,000 125 2,476,73450,001-500,000 14 1,810,189500,001 and above 1 514,668Total 613 6,331,677

2 Kenanga Managed Growth Fund Interim Report

2. MANAGER’S REPORT

2.1 Explanation on whether the Fund has achieved its investment objective

For the financial period under review, the Fund fulfilled its investment objective, having invested in a mixture of equity securities, fixed income securities and money market instruments.

2.2 Comparison between the Fund’s performance and performance of the benchmark

Performance Chart Since Launch (23/04/2004– 30/09/2015)Kenanga Managed Growth Fund vs Benchmark

% Cumulative Return, Launch to 30/9/2015

100.00

-20.00

0.00

120.00

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40.00

60.00

80.00

Apr

200

4Ju

n 20

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Dec

200

4

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200

5

Jun

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Dec

200

6

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Dec

200

7

Jun

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200

8

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200

9

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Dec

201

0

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201

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Jun

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2015

Kenanga Managed Growth : 91.04FTSE Bursa Malaysia Top 100 Index (50%) & All MGS Index by RAM Quant Shop (50%) : 78.58

Source: Novagni Analytics and Advisory Sdn Bhd

2.3 Investment strategies and policies employed during the period under review

For the financial period under review, the Fund’s investment strategy and policy were to invest primarily in a mixture of equity securities, fixed income securities and money market instrument. The strategy employed was in line with that disclosed in the master prospectus.

2.4 The Fund’s asset allocation as at 30 September 2015 and comparison with the previous financial period

Asset 30 Sept 2015 30 Sept 2014Quoted investment securities 52.8% 57.4%Unquoted bonds 44.0% 34.1%Short term deposits and cash 3.2% 8.5%


2.4 The Fund’s asset allocation as at 30 September 2015 and comparison with the previous financial period (Contd.)

Reason for the differences in asset allocation

As at end 30 September 2015, the Fund’s equity exposure had decreased from 57.4% to 52.8%. The decreased in equities exposure during the period under review was mainly due to fund manager taking a more defensive stance in view of the volatile market conditions. Fixed Income exposure was increased as the prospect of further policy rate hikes by BNM diminished, given the moderation in domestic and global growth expectations.

2.5 Fund performance analysis based on NAV per unit (adjusted for income distribution; if any) since last review period

Asset Period under reviewKenanga Managed Growth Fund -4.78%Benchmark -5.36%

* FTSE Bursa Malaysia 100 Index (50%) and the All Malaysian Government Securities Index (50%)Source: Novagni Analytics and Advisory Sdn Bhd

The Fund recorded a negative return of 4.78%, outperforming the benchmark negative return of 5.36%. The Fund’s outperformance as compared to the benchmark was attributed to good stock picking strategy.

2.6 Review of the market

Equity Market Review

The interim financial period (April to September 2015) under review witnessed a turbulent period for the equity markets. In tandem with the crude oil price recovery, the FBM KLCI Index climbed steadily from April onwards to peak at the year’s high of 1,862.80 points on 21 April 2015. Thereafter, a confluence of negative factors from both the domestic and global scene hammered the FBM KLCI Index all the way down to an intra-day low of 1,503.68 points on 25 August 2015 before recovering to 1,612.74 points by end August 2015.

The FBM KLCI market correction started from end April and was initially driven by selloff ahead of a potential downgrade of Malaysia’s sovereign credit rating by Fitch Ratings. Fitch had earlier downgraded Malaysia’s outlook to “Negative” in July 2013. This was further exacerbated by: a) the allegations relating to a strategic development company wholly-owned by the Ministry of Finance; b) the weak corporate results report for first quarter of 2015; and c) drag from Tenaga (which is an index heavyweight) share price correction on concerns that it might overpay for Edra Energy’s power assets. Contrasting the weak economic and market performance of ASEAN from April to June, China and Hong Kong markets appreciated sharply on increased retail participation and high hopes for the state owned enterprises reforms. As a result, global investors rotated out from the underperforming ASEAN markets into the China and Hong Kong markets.


2.6 Review of the market (Contd.)

Equity Market Review (Contd.)

Global markets were later rattled by Greece by end June as the country shut its banking system for 6 days and imposed capital controls to stem fund outflows. In an unexpected move, Fitch announced on 30 June that it had affirmed Malaysia’s sovereign credit rating at “A-” while the outlook was upgraded to “Stable” from “Negative” on the back of the country’s improving fiscal position from GST implementation and fuel subsidy reforms. Unfortunately the surprise upgrade did not provide any cheer to the market which continued to drop along with the weakening Ringgit.

July was a relatively calmer month but equity markets tumbled in August again. In the commodities space, crude oil and palm oil plunged in July and August on the back of oversupply concerns. The Brent crude oil and palm oil dipped 33% and 16% respectively to US$42.7/barrel and RM1867/tonne in a short span of two months before recovering some gains by end August.

In the domestic front, the cabinet reshuffling by end July raised worries on political uncertainties. Malaysia’s forex reserve also fell to a low of US$94.5 billion in mid-August mainly attributed to capital outflows and possible Bank Negara’s intervention in the forex market to defend Ringgit. Not helping was another set of poor corporate earnings for the second quarter, with about 50% companies reporting results below expectation and only 10% surprising on the upside, bringing the weakest hit/miss earnings ratio in the last 16 quarters. In the global front, China shocked the world in its sudden move of devaluing RMB by 2% in August. This is the first devaluation since 1994 and the largest RMB devaluation in two decades. The devaluation sparked concerns of a decelerating Chinese economy and potential competitive currency devaluation amongst emerging countries to fight for exports. Both domestic and global markets fell sharply in August before chalking some recovery towards month end.

September was another volatile month for Malaysia as the KLCI first rebounded strongly on the back of some stability returning to regional markets and Wall Street and news that the government was allocating RM20bn to ValueCap to buy up good value stocks, only to give up much of those gains when the Federal Reserve kept interest rates unchanged. On 14 Sep, Prime Minister Dato’ Sri Najib Razak announced a slew of stimulus measures aimed at strengthening the economy, amongst which included the pumping of RM20bn into ValueCap to invest in undervalued Malaysian stocks. The FBM KLCI trended higher on the news. Subsequently, at the highly-anticipated September FOMC meeting, US interest rates were left unchanged in view of the weak global economy, persistently low inflation and unstable financial markets – once again leaving investors playing the rate-hike guessing game.

The cumulative net foreign selling in the domestic equities reached RM17.7 billion for the first nine months of 2015, way above RM6.9 billion total net selling in 2014. Foreign shareholdings have therefore declined to 22.6% as of end August 2015 from 23.6% as of end 2014.

Equity Market Outlook

While the outlook for Malaysia’s economy remains challenging, near term downside risk for the market could be limited after the massive equities selloff by foreigners. Market direction is expected to be closely tied to the Ringgit performance. Following the sharp depreciation of Ringgit in the past few months, the probability of another substantial drop for Ringgit is less likely. As we are entering into the fourth quarter, possibility of a window closing for the year end period cannot be discounted. We will therefore slowly increase exposure to laggards which may benefit from the year end closing.


2.6 Review of the market (Contd.)

Fixed Income Market Review

The timing of the Fed’s rate hike remained the main theme in the US government bond market. The FOMC meetings suggested that the path to rising rates will be even more gradual than previously predicted. A mixed bag of economic data also complicated investors’ prediction over the Fed’s data-dependent policy direction. Meanwhile, US Treasuries (UST) ended the financial period under review on a weaker note after volatile swings.

On the local front, government bonds closed the financial period under review on a weaker note. Selling pressure was seen heavy from the belly to the long end of the curve, with 3-, 5-, 7- and 10-year notes climbing 4, 36, 40 and 28 bps respectively. The broad selling occurred amid a bearish Ringgit performance, as well as a slump in oil and other commodity prices. Lingering uncertainties over domestic political developments also contributed to negative sentiments, and in turn intensified jitters among investors.

YTD, the Malaysian Ringgit (MYR) weakened by 25.67% against the US Dollar (USD), from 3.4965 to 4.3950. The downslide of the MYR can be attributed to a few factors, namely declining oil prices, the slowdown in China and concerns over the domestic political situation.

Fixed Income Market Outlook

Into the second half of the financial period under review, volatility, which is the new norm, will be with us for a long while but we are expecting some degree of market stability into later part of the year once US Fed decidedly to raise rate and market focus will be shifting from broadly bearish to relative value play.

The September Fed FOMC minutes suggest a tactical delay to its rate hiking cycle and we expect that the first hike will happen in December 2015. A 2016 rate hike may prove tougher amid presidential election and likely slower GDP growth. The peak rate in this cycle however will likely to be lower than past experiences.

In Asia, trading direction will be guided by possibility of monetary easing against those of commodity-dependent economies. China, India, Taiwan and Singapore are expected to have the ability and room to ease and supported by domestic conditions. On the other hand, Indonesia and Malaysia, which have high commodity dependency and high foreign ownership of local currency bonds, will likely to be more vulnerable compared to its regional peers.

Malaysia is one of few Asian countries that has high correlation with US Treasury and likely to be most impacted as we approach Fed lift off. We expect upward pressure on local rates compared to what the history is suggesting if current depreciation path of Ringgit Malaysia continues and the loan-to-deposit ratio of banking system stays in excess of 85%.

Risk of fiscal slippage will likely to cause spike in yields, elevate government debt service charges, constraint future policy options and reignite fear of sovereign ratings downgrade. We however take comfort of government’s commitment to fiscal consolidation this year and beyond.


2.7 Income Distribution

For the financial period under review, the Fund did not declare any income distribution.

2.8 Details of any unit split exercise

The Fund did not carry out any unit split exercise during the financial period under review.

2.9 Significant changes in the state of affair of the Fund during the financial period

There were no significant changes in the state of affair of the Fund during the financial period and up until the date of the manager’s report, not otherwise disclosed in the financial statements.

2.10 Circumstances that materially affect any interests of the unitholders

During the financial period under review, there were no circumstances that materially affected any interests of the unitholders.

2.11 Rebates & Soft commissions

Any rebates received are channeled back to the Fund. On the other hand, soft commissions received from the stockbrokers for goods and services such as technical analysis software, fundamental database, financial wire services, stock quotation system and portfolio management software incidental to investment management of the Fund shall be retained by the Manager. For the financial period under review, the Manager has received soft commissions from stockbrokers.


3. FUND PERFORMANCE

3.1 Details of portfolio composition of Kenanga Managed Growth Fund (“the Fund”) for the financial period as at 30 September 2015 against last 3 financial years as at 31 March are as follows:

a. Distribution among industry sectors and category of investments:

As at FY FY FY30.9.2015 2015 2014 2013

% % % %

Trading/Services 11.1 13.6 26.2 16.8Finance 8.1 10.0 10.4 9.4Construction 8.0 3.4 1.2 1.5Technology 7.4 5.4 1.5 -Industrial products 5.0 4.6 3.6 0.9Consumer products 4.2 1.7 2.3 1.6Infrastructure 2.4 3.4 2.9 4.7Properties 2.4 3.1 4.2 2.4Plantations - 1.2 2.1 4.1REITs 4.2 5.5 1.8 -Warrants - 2.4 2.0 0.5Unquoted corporate bonds 44.0 39.1 31.0 44.3Unquoted government guaranteed bonds - - - 13.3Short term deposits and cash 3.2 6.6 10.8 0.5

100.0 100.0 100.0 100.0

Note: The above mentioned percentages are based on total investment market value plus cash.

b. Distribution among markets

The Fund invests in local quoted investment securities, unquoted bonds and cash instruments only.


3.2 Performance details of the Fund for the financial period ended 30 September 2015 against last 3 financial years ended 31 March are as follows:

Period from1.4.2015 to FY FY FY

30.9.2015 2015 2014 2013

Net asset value (“NAV”) (RM Million) 5.25* 6.19 11.41 31.97Units in circulation (Million) 6.33 7.11 12.95 40.62NAV per unit (RM) 0.8288* 0.8704 0.8811 0.7870Highest NAV per unit (RM) 0.8885 0.9091 0.8811 0.7882Lowest NAV per unit (RM) 0.7947 0.8043 0.7864 0.7475Total return (%) -4.78 -1.21 11.96 2.51- Capital growth (%) -4.78 -1.21 11.96 2.51- Income growth (%) - - - -Gross distribution per unit (sen) - - - -Net distribution per unit (sen) - - - -Management expense ratio (“MER”) (%) 1 1.04 2.02 2.00 1.72Portfolio turnover ratio (“PTR”) (times) 2 0.38 0.69 1.34 3.65

Note:TotalreturnistheactualreturnoftheFundfortherespectivefinancialperiod/years,computedbased on NAV per unit and net of all fees.

MER is computed based on the total fees and expenses incurred by the Fund divided by the average fund size calculated on a daily basis. PTR is computed based on the average of the total acquisitions and total disposals of investment securities of the Fund divided by the average fund size calculated on a daily basis.

Above NAV and NAV per unit are not shown as ex-distribution as there were no distribution declaredbytheFundinthecurrentfinancialperiodunderreview.

1MERisloweragainstpreviousfinancialyearasthecomputationisinrespectof6monthsonly.

2PTRis loweragainstpreviousfinancialyearmainlydueto lowertradingactivitiesandalower investment level due to defensive positioning

* Based on bid price fair valuation method on all investments held by the Fund as at 30 September 2015, the NAV and NAV per unit would be RM5.23million and RM0.8268respectively.(AsdisclosedunderNote12ofthefinancialstatements)


3.3 Average total return of the Fund

1 Year30 Sep 14 - 30 Sep 15

3 Years30 Sep 12 - 30 Sep 15

5 Years30 Sep 10 - 30 Sep 15

Kenanga Managed Growth Fund -7.54% 7.86% 20.82%Benchmark* -5.12% 4.58% 16.38%


3.4 Annual total return of the Fund

Period under review

31 Mar15 - 30 Sep 15

1 Year31 Mar14 - 31 Mar 15

1 Year31 Mar13 - 31 Mar 14

1 Year31 Mar12 - 31 Mar 13

1 Year31 Mar11 - 31 Mar 12

1 Year31 Mar10 - 31 Mar 11

Kenanga Managed Growth Fund

-4.78% -1.21% 11.96% 2.51% 3.83% 16.08%

Benchmark* -5.36% 1.58% 5.75% 4.74% 4.73% 11.43%


Investors are reminded that past performance is not necessarily indicative of future performance. Unit prices and investment returns may fluctuate.


4 TRUSTEE’S REPORT TO THE UNITHOLDERS OF KENANGA MANAGED GROWTH FUND

We, CIMB COMMERCE TRUSTEE BERHAD (“the Trustee”), being the Trustee of KENANGA MANAGED GROWTH FUND (“the Fund”) are of the opinion that KENANGA INVESTORS BERHAD (“the Manager”), acting in the capacity of Manager of the Fund, has fulfilled its duties in the following manner for the financial period ended 30 September 2015.

a) The Fund has been managed in accordance with the limitations imposed on the investment powers of the Manager and the Trustee under the Deed, the Securities Commission Malaysia’s Guidelines on Unit Trust Funds, the Capital Markets and Services Act 2007 (as amended from time to time) and other applicable laws;

b) Valuation/pricing of units of the Fund has been carried out in accordance with the Deed and relevant regulatory requirements; and

c) Creation and cancellation of units have been carried out in accordance with the Deed and relevant regulatory requirements.

For and on behalf of CIMB COMMERCE TRUSTEE BERHAD (313031-A)

LEE KOOI YOKE Chief Operating Officer

Kuala Lumpur, Malaysia

23 November 2015


5. STATEMENT BY THE MANAGER

We, Ismitz Matthew De Alwis and Dato’ Bruce Kho Yaw Huat, being the directors of Kenanga Investors Berhad, do hereby state that, in the opinion of the Manager, the accompanying statement of financial position as at 30 September 2015 and the related statement of comprehensive income, statement of changes in net asset value and statement of cash flows for the financial period from 1 April 2015 to 30 September 2015 together with notes thereto, are drawn up in accordance with Malaysian Financial Reporting Standards and International Financial Reporting Standards so as to give a true and fair view of the financial position of Kenanga Managed Growth Fund as at 30 September 2015 and of its financial performance and cash flows for the period from 1 April 2015 to 30 September 2015 and comply with the requirements of the Deed.

For and on behalf of the Manager Kenanga Investors Berhad

Ismitz Matthew De Alwis Dato’ Bruce Kho Yaw Huat

Kuala Lumpur, Malaysia

23 November 2015


6. FINANCIAL STATEMENT

6.1 STATEMENT OF COMPREHENSIVE INCOMEFOR THE FINANCIAL PERIOD FROM 1 APRIL 2015 TO 30 SEPTEMBER 2015 (unaudited)

Note1.4.2015 to

30.9.20151.4.2014 to

30.9.2014RM RM

INVESTMENT INCOMEDividend income 63,350 80,974Interest income 59,953 95,745Net (loss)/gain from investments:

- Financial assets at fair value through profit or loss (“FVTPL”) 4 (345,958) 151,458

(222,655) 328,177

EXPENSESManager’s fee 5 44,466 78,739Trustee’s fee 6 4,513 7,521Auditors’ remuneration 4,000 5,676Tax agent’s fee 1,950 1,655Administration expenses 4,516 9,177

59,445 102,768

NET (LOSS)/INCOME BEFORE TAX (282,100) 225,409

Income tax 7 8,735 26,497

NET (LOSS)/INCOME AFTER TAX, REPRESENTING TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD (273,365) 251,906

Net (loss)/income after tax is made up as follows:Realised gain 13,372 600,829Unrealised loss 4 (286,737) (348,923)

(273,365) 251,906

The accompanying notes form an integral part of the financial statements.


6.2 STATEMENT OF FINANCIAL POSITIONAS AT 30 SEPTEMBER 2015 (unaudited)

Note 30.9.2015 30.9.2014RM RM

INVESTMENTSFinancial assets at FVTPL 4 5,081,292 6,119,486Short term deposits 8 160,632 553,504

5,241,924 6,672,990

OTHER ASSETSOther receivables 9 48,081 75,243Tax recoverable 14,370 10,954Cash at bank 8,727 12,139

71,178 98,336

TOTAL ASSETS 5,313,102 6,771,326

LIABILITIESAmount due to Manager 5,009 17,514Amount due to Trustee 740 740Other payables 10 72,534 25,613TOTAL LIABILITIES 78,283 43,867

EQUITYUnitholders’ contribution 2,766,642 3,662,813Retained earnings 2,468,177 3,064,646NET ASSET VALUE (“NAV”) ATTRIBUTABLE

TO UNITHOLDERS 11 5,234,819 6,727,459

TOTAL EQUITY AND LIABILITIES 5,313,102 6,771,326

NUMBER OF UNITS IN CIRCULATION 11(a) 6,331,677 7,513,093

NET ASSET VALUE PER UNIT (RM) 12 0.8268 0.8954



6.3 STATEMENT OF CHANGES IN NET ASSET VALUEFOR THE FINANCIAL PERIOD FROM 1 APRIL 2015 TO 30 SEPTEMBER 2015 (unaudited)

NoteUnitholders’ contribution

Retained earnings Total NAV

RM RM RM1.4.2015 to 30.9.2015At beginning of the period 3,433,393 2,741,542 6,174,935Total comprehensive loss - (273,365) (273,365)Creation of units 11(a) 91,086 - 91,086Cancellation of units 11(a) (757,514) - (757,514)Distribution equalisation 11(a) (323) - (323)At end of the period 2,766,642 2,468,177 5,234,819

1.4.2014 to 30.9.2014At beginning of the period 3,772,560 7,608,264 11,380,824Total comprehensive income - 251,906 251,906Creation of units 11(a) 32,501 - 32,501Cancellation of units 11(a) (4,844,039) - (4,844,039)Distribution equalisation 11(a) (93,733) - (93,733)Reclassification of retained earnings 11(a) 4,795,524 (4,795,524) -At end of the period 3,662,813 3,064,646 6,727,459



6.4 STATEMENT OF CASH FLOWSFOR THE FINANCIAL PERIOD FROM 1 APRIL 2015 TO 30 SEPTEMBER 2015 (unaudited)

1.4.2015 to 30.9.2015

1.4.2014 to 30.9.2014

RM RMCASH FLOWS FROM OPERATING AND INVESTING ACTIVITIESProceeds from sale of financial assets at FVTPL 2,308,233 5,575,073Purchase of financial assets at FVTPL (1,937,253) (1,495,803)Dividend received 58,326 82,310Interest received 59,969 106,155Manager’s fee paid (45,943) (84,951)Trustee’s fee paid (4,538) (8,310)Auditors’ remuneration paid (8,000) (8,000)Payment for other fees and expenses (9,258) (5,595)Cash generated from operating and investing activities 421,536 4,160,879Income tax refund 5,319 74,087Net cash generated from operating and investing activities 426,855 4,234,966

CASH FLOWS FROM FINANCING ACTIVITIESCash received from units created 92,097 32,408Cash paid on units cancelled (758,085) (4,927,466)Net cash used in financing activities (665,988) (4,895,058)

NET DECREASE IN CASH AND CASH EQUIVALENTS (239,133) (660,092)CASH AND CASH EQUIVALENTS AT BEGINNING OF

THE PERIOD 408,492 1,225,735CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 169,359 565,643

Cash and cash equivalents comprise:Cash at bank 8,727 12,139Short term deposits 160,632 553,504

169,359 565,643



6.5 NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL PERIOD FROM 1 APRIL 2015 TO 30 SEPTEMBER 2015 (unaudited)

1. THE FUND, THE MANAGER AND THEIR PRINCIPAL ACTIVITIES

Kenanga Managed Growth Fund (the “Fund”) was constituted pursuant to the executed Master Deed dated 16 April 2004 (collectively, together with deeds supplemental thereto, referred to as “the Deed”) between the Manager, Kenanga Funds Berhad, and CIMB Commerce Trustee Berhad (“the Trustee”). The Fund commenced operations on 23 April 2004 and will continue to be in operation until terminated by the Trustee as provided under Clause 38 of the Deed.

Pursuant to the executed Seventh Supplemental Deed dated 15 May 2013 between Kenanga Investors Berhad and CIMB Commerce Trustee Berhad, Kenanga Investors Berhad was appointed as the Manager of the Fund with effect from 8 June 2013.

Kenanga Investors Berhad is a wholly-owned subsidiary of Kenanga Investment Bank Berhad, which in turn is a wholly-owned subsidiary of K & N Kenanga Holdings Berhad that is listed on the Main Board of Bursa Malaysia Securities Berhad. All of these companies are incorporated in Malaysia.

The principal place of business of the Manager is Suite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur.

The Fund seeks to provide investors long term capital growth through diversified investments in equities and bonds.

The unaudited financial statements were authorised for issue by the Chief Executive Officer of the Manager on 23 November 2015.

2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Fund is exposed to a variety of risks including market risk (which includes interest rate risk and price risk), credit risk and liquidity risk. Whilst these are the most important types of financial risks inherent in each type of financial instruments, the Manager and the Trustee would like to highlight that this list does not purport to constitute an exhaustive list of all the risks inherent in an investment in the Fund.

The Fund has an approved set of investment guidelines and policies as well as internal controls which sets out its overall business strategies to manage these risks to optimise returns and preserve capital for the unitholders, consistent with the long term objectives of the Fund.


2. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTD.)

a. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial asset at FVTPL will fluctuate because of changes in market prices. Market risk includes interest rate risk and price risk

Market risk arises when the value of the investments fluctuates in response to the activities of individual companies, general market or economic conditions. It stems from the fact that there are economy-wide perils, which threaten all businesses. Hence, investors are exposed to market uncertainties. Fluctuation in the investments’ price caused by uncertainties in the economic, political and social environment will affect the NAV of the Fund.

The Manager manages the risk of unfavourable changes in prices by cautious review of the investments and continuous monitoring of their performance and risk profiles.

i. Interest rate risk

The risk refers to how the changes in the interest rate environment would affect the performance of Fund’s investments. Rates offered by the financial institutions will fluctuate according to the Overnight Policy Rate determined by Bank Negara Malaysia and this has direct correlation with the Fund’s investments in unquoted corporate bonds and deposits.

The Fund’s exposure to the interest rate risk is mainly confined to unquoted corporate bonds.

Interest rate risk sensitivity

The following table demonstrates the sensitivity of the Fund’s profit for the financial period to a reasonably possible change in rate of return, with all other variables held constant.

Changes in rateEffects on profit

for the periodIncrease/(Decrease) Increase/(Decrease)

Basis points RM30.9.2015Financial assets at FVTPL 5/(5) 1,142/(1,142)

30.9.2014Financial assets at FVTPL 5/(5) 1,128/(1,128)

In practice, the actual trading results may differ from the sensitivity analysis above and the difference could be material.



a. Market Risk (Contd.)

i. Interest rate risk (Contd.)

Interest rate risk exposure

The following table analyses the Fund’s interest rate risk exposure. The Fund’s assets and liabilities are disclosed at fair value and categorised by the earlier of contractual re-pricing or maturity dates.

Up to 1 year

Above 1 year - 5 years

Above 5 years - 15 years

Non-exposure

to interest rate

movement Total

Weighted average effective interest

rate*RM RM RM RM RM %

30.9.2015AssetsFinancial assets at

FVTPL 650,948 1,536,549 97,057 2,796,738 5,081,292 4.85Short term

deposits 160,632 - - - 160,632 3.20Other assets 14 - - 56,794 56,808

811,594 1,536,549 97,057 2,853,532 5,298,732

LiabilitiesOther liabilities - - - 78,283 78,283

Total interest rate sensitivity gap 811,594 1,536,549 97,057 2,775,249 5,220,449

30.9.2014AssetsFinancial assets at

FVTPL 402,603 1,757,103 97,166 3,862,614 6,119,486 4.87Short term

deposits 553,504 - - - 553,504 3.20Other assets 49 - - 87,333 87,382

956,156 1,757,103 97,166 3,949,947 6,760,372

LiabilitiesOther liabilities - - - 43,867 43,867

Total interest rate sensitivity gap 956,156 1,757,103 97,166 3,906,080 6,716,505

* Computed based on interest-bearing assets only.




ii. Price risk

Price risk is the risk of unfavorable changes in the fair values of quoted equity securities, quoted collective investment schemes and quoted warrants. The Fund invests in quoted equity securities, quoted collective investment schemes and quoted warrants which are exposed to price fluctuations. This may then affect the NAV per unit of the Fund.

Price risk sensitivity

The Manager’s best estimate of the effect on the profit for the financial period due to a reasonably possible change in investments in quoted equity securities, quoted collective investment schemes and quoted warrants with all other variables held constant is indicated in the table below:

Changes in priceEffects on profit

for the periodIncrease/(Decrease) Increase/(Decrease)

Basis points RM30.9.2015Financial assets at FVTPL 5/(5) 1,387/(1,387)

30.9.2014Financial assets at FVTPL 5/(5) 1,920/(1,920)

In practice, the actual trading results may differ from the sensitivity analysis above and the difference could be material.

Price risk concentration

The following table sets out the Fund’s exposure and concentration to price risk based on its portfolio of financial instruments as at the reporting date.

Fair value Percentage of NAV30.9.2015 30.9.2014 30.9.2015 30.9.2014

RM RM % %

Financial assets at FVTPL 2,773,229 3,839,711 53.0 57.1




ii. Price risk (Contd.)

Price risk concentration (Contd.)

The Fund’s concentration of investment security price risk from the Fund’s quoted equity securities, quoted collective investment schemes and quoted warrants analysed by sector is as follows:

Fair value Percentage of NAV30.9.2015 30.9.2014 30.9.2015 30.9.2014

RM RM % %

Trading/Services 583,466 1,768,805 11.1 26.2Finance 423,200 573,621 8.1 8.6Construction 420,324 110,700 8.0 1.6Technology 391,349 189,672 7.5 2.8Industrial products 261,305 520,842 5.0 7.9Consumer products 219,245 - 4.2 -Infrastructure 128,760 255,792 2.5 3.8Properties 124,892 97,500 2.4 1.4REITs 220,688 187,544 4.2 2.8Warrants - 135,235 - 2.0

2,773,229 3,839,711 53.0 57.1

b. Credit Risk

Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss to the Fund by failing to discharge an obligation. The Manager manages the credit risk by undertaking credit evaluation to minimise such risk.

i. Credit risk exposure

As at the reporting date, the Fund’s maximum exposure to credit risk is represented by the carrying amount of each class of financial asset recognised in the statement of financial position.

ii. Financial assets that are either past due or impaired

As at the reporting date, there are no financial assets that are either past due or impaired.



b. Credit Risk (Contd.)

iii. Credit quality of financial assets

The Fund invests only in unquoted corporate bonds with at least investment grade credit rating by a credit rating agency. The following table analyses the Fund’s portfolio of unquoted corporate bonds by rating category:

Financial assets at FVTPL

Percentage of total unquoted bonds Percentage of NAV

30.9.2015 30.9.2014 30.9.2015 30.9.2014% % % %

RatingAAA 36.9 38.0 16.3 12.9AA3 25.9 4.3 11.4 1.4AA1 17.6 17.9 7.7 6.1AA+ 10.8 - 4.8 -AA- 8.8 8.9 3.9 3.0AA2 - 30.9 - 10.5

100.0 100.0 44.1 33.9

The Fund invests in deposits with licensed financial institutions under Financial Services Act 2013 and Islamic Financial Services Act 2013. The following table analyses the licensed financial institutions by rating category:

Short term deposits

Percentage of total short term deposits Percentage of NAV30.9.2015 30.9.2014 30.9.2015 30.9.2014

% % % %RatingP1 100.0 100.0 3.1 8.2



b. Credit Risk (Contd.)

iv. Credit risk concentration

Concentration risk is monitored and managed based on sectoral distribution. The table below analyses the Fund’s portfolio of unquoted corporate bonds by sectoral distribution:

Percentage of total unquoted bonds Percentage of NAV

30.9.2015 30.9.2014 30.9.2015 30.9.2014% % % %

Finance 47.8 86.8 21.0 29.5Utilities 21.8 4.3 9.6 1.4Plantations 21.7 - 9.6 -Industrial products 8.7 - 3.9 -Consumer product - 8.9 - 3.0

100.0 100.0 44.1 33.9

c. Liquidity Risk

Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities that are to be settled by delivering cash or another financial asset. Exposure to liquidity risk arises because of the possibility that the Fund could be required to pay its liabilities or cancel its units earlier than expected. The Fund is exposed to cancellation of its units on a regular basis. Units sold to unitholders by the Manager are cancellable at the unitholder’s option based on the Fund’s NAV per unit at the time of cancellation calculated in accordance with the Deed.

The liquid assets comprise cash, deposits with licensed financial institutions and other instruments, which are capable of being converted into cash within 7 days.

The following table analyses the maturity profile of the Fund’s financial assets and financial liabilities in order to provide a complete view of the Fund’s contractual commitments and liquidity.



c. Liquidity Risk (Contd.)

NoteUp to

1 year

Above 1 year - 5 years

Above 5 year -

15 years TotalRM RM RM RM

30.9.2015AssetsFinancial assets at FVTPL 3,447,686 1,536,549 97,057 5,081,292Short term deposits 160,632 - - 160,632Other assets 56,808 - - 56,808

(i) 3,665,126 1,536,549 97,057 5,298,732

LiabilitiesOther liabilities (ii) 78,283 - - 78,283

Equity (iii) 5,234,819 - - 5,234,819

Liquidity gap (1,647,976) 1,536,549 97,057 (14,370)

30.9.2014AssetsFinancial assets at FVTPL 4,265,217 1,757,103 97,166 6,119,486Short term deposits 553,504 - - 553,504Other assets 87,382 - - 87,382

(i) 4,906,103 1,757,103 97,166 6,760,372

LiabilitiesOther liabilities (ii) 43,867 - - 43,867

Equity (iii) 6,727,459 - - 6,727,459

Liquidity gap (1,865,223) 1,757,103 97,166 (10,954)

(i) Financial assets

Analysis of financial assets at FVTPL into maturity groupings is based on the expected date on which these assets will be realised. The Fund’s investments in quoted equity securities, quoted collective investment schemes and quoted warrants have been included in the “up to 1 year” category on the assumption that these are highly liquid investments which can be realised should all of the Fund’s unitholders’ equity be required to be redeemed. For other assets, the analysis into maturity groupings is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the expected date on which the assets will be realised.



c. Liquidity Risk (Contd.)

(ii) Financial liabilities

The maturity grouping is based on the remaining period from the end of the reporting period to the contractual maturity date or if earlier, the date on which liabilities will be settled. When the counterparty has a choice of when the amount is paid, the liability is allocated to the earliest period in which the Fund can be required to pay.

(iii) Equity

As unitholders can request for redemption of their units, they have been categorised as having a maturity of “up to 1 year”. As a result, it appears that the Fund has a liquidity gap within “up to 1 year”. However, the Fund believes that it would be able to liquidate its investments should the need arises to satisfy all the redemption requirements.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Accounting

The financial statements of the Fund have been prepared in accordance with Malaysian Financial Reporting Standards (“MFRS”) as issued by the Malaysian Accounting Standards Board (“MASB”) and International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”).

The accounting policies adopted are consistent with those of the previous financial period except for the adoption of the new and amended MFRS and Interpretation Committee (“IC”) Interpretations which became effective for the Fund on 1 April 2015. The adoption of the new and amended MFRS and IC Interpretations did not have any significant impact on the financial position or performance of the Fund.

The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

b. Standards, Amendments and Interpretations Issued But Not Yet Effective

As at the date of authorisation of these financial statements, the following Standards, Amendments and Interpretations that have been issued by MASB will be effective for the Fund in future periods. The Fund intends to adopt the relevant standards when they become effective.


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTD.)

b. Standards, Amendments and Interpretations Issued But Not Yet Effective (Contd.)

Description

Effective for financial period

beginning on or after

Amendments to MFRS contained in the documents entitled “Annual Improvements to MFRS 2012 - 2014 cycle” 1 January 2016

MFRS 14: Regulatory Deferral Accounts 1 January 2016Amendments to MFRS 10, MFRS 12 and MFRS 128:

Investment Entities: Applying the Consolidation Exception 1 January 2016Amendments to MFRS 10 and MFRS 128: Sale or Contribution of

Assets between an Investor and its Associate or Joint Venture 1 January 2016Amendments to MFRS 11: Accounting for Acquisitions of

Interests in Joint Operations 1 January 2016Amendments to MFRS 101: Disclosure Initiatives 1 January 2016Amendments to MFRS 116 and MFRS 138: Clarification of

Acceptable Methods of Depreciation and Amortisation 1 January 2016Amendments to MFRS 116 and MFRS 141: Agriculture:

Bearer Plants 1 January 2016Amendments to MFRS 127: Equity Method in Separate Financial

Statements 1 January 2016MFRS 15: Revenue from Contracts with Customers 1 January 2018MFRS 9: Financial Instruments (IFRS 9 Financial Instruments as

issued by IASB in July 2014) 1 January 2018

The Fund will adopt the above pronouncements when they become effective in the respective financial periods. These pronouncements are not expected to have any significant impact to the financial statements of the Fund upon their initial application, other than MFRS 9.

MFRS 9 replaces MFRS 139 on the following requirements: classification and measurement of financial assets and financial liabilities as defined in MFRS 139, impairment methodology and hedge accounting. The Fund is in the process of making an assessment of the impact of this Standard.

c. Financial Assets

Financial assets are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instruments.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at FVTPL, directly attributable transaction costs.

The Fund determines the classification of its financial assets at initial recognition.



c. Financial Assets (Contd.)

i. Financial assets at FVTPL

Financial assets are classified as financial assets at FVTPL if they are held for trading or are designated as such upon initial recognition.

Financial assets held for trading include quoted equity securities, quoted collective investment schemes, quoted warrants and unquoted corporate bonds acquired principally for the purpose of selling in the near term.

Subsequent to initial recognition, financial assets at FVTPL are measured at fair value. Changes in the fair value of those financial instruments are recorded in profit or loss.

Interest earned and dividend revenue elements of such instruments are recorded separately in “interest income” and “dividend income”, respectively.

ii. Receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as receivables.

Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method. Gain or loss is recognised in profit or loss when the receivable is derecognised or impaired, and through the amortisation process.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received is recognised in profit or loss.

d. Impairment of Financial Assets

The Fund assesses at each reporting date whether there is any objective evidence that a financial asset is impaired.

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Fund considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective rate of return. The impairment loss is recognised in profit or loss.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets, with the exception of receivables, where the carrying amount is reduced through the use of an allowance account. When a receivable becomes uncollectible, it is written off against the allowance account.



d. Impairment of Financial Assets (Contd.)

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the assets does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

e. Income

Income is recognised to the extent that it is probable that the economic benefits will flow to the Fund and the income can be reliably measured. Income is measured at the fair value of consideration received or receivable.

Interest income, which includes the accretion of discount and amortisation of premium on fixed income securities, is recognised using the effective interest method.

Dividend income is recognised on declared basis, when the right to receive the dividend is established.

The realised gain or loss on sale of investments is measured as the difference between the net disposal proceeds and the carrying amount of the investment.

f. Cash and Cash Equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash at bank and short term deposits with licensed financial institutions.

g. Income Tax

Income tax on the profit or loss for the financial period comprises current tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the financial period.

As no temporary differences have been identified, no deferred tax has been recognised.

h. Unrealised Reserves

Unrealised reserves represent the net gain or loss arising from carrying investments at their fair values at reporting date. This reserve is not distributable.

i. Financial Liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability.

Financial liabilities are recognised in the statement of financial position when, and only when, the Fund becomes a party to the contractual provisions of the financial instrument. The Fund’s financial liabilities are classified as other financial liabilities. The Fund’s financial liabilities are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.



i. Financial Liabilities (Contd.)

A financial liability is derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

j. Unitholders’ Contribution – NAV Attributable to Unitholders

The unitholders’ contribution to the Fund is classified as equity instruments.

Distribution equalisation represents the average amount of undistributed net income included in the creation or cancellation price of units. This amount is either refunded to unitholders by way of distribution and/or adjusted accordingly when units are released back to the Trustee.

k. Functional and Presentation Currency

The financial statements of the Fund are measured using the currency of the primary economic environment in which the Fund operates (“the functional currency”). The financial statements are presented in Ringgit Malaysia (“RM”), which is also the Fund’s functional currency.

l. Distribution

Distributions are at the discretion of the Manager. A distribution to the Fund’s unitholders is accounted for as a deduction from retained earnings.

m. Significant Accounting Judgments and Estimates

The preparation of financial statements requires the use of certain accounting estimates and exercise of judgment. Estimates and judgments are continually evaluated and are based on past experience, reasonable expectations of future events and other factors.

i. Critical judgments made in applying accounting policies

There are no major judgments made by the Manager in applying the Fund’s accounting policies.

ii. Key sources of estimation uncertainty

There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period.


4. FINANCIAL ASSETS AT FVTPL

30.9.2015 30.9.2014 RM RMFinancial assets held for trading, at FVTPL:

Quoted equity securities 2,552,541 3,516,932Quoted collective investment schemes 220,688 187,544Quoted warrants - 135,235Unquoted corporate bonds 2,308,063 2,279,775

5,081,292 6,119,486

1.4.2015 to 30.9.2015

1.4.2014 to 30.9.2014

RM RMNet (loss)/gain on financial assets at FVTPL comprised:

Realised(loss)/gain on disposals (59,221) 500,381Unrealised changes in fair values (286,737) (348,923)

(345,958) 151,458

Details of financial assets at FVTPL as at 30 September 2015:

Quantity

Aggregate/Amortised

cost Fair valuePercentage

of NAV RM RM %

Quoted equity securities

Trading/ServicesAxiata Group Berhad 13,518 83,252 77,729 1.5Berjaya Auto Berhad 43,600 117,495 84,148 1.6Dialog Group Berhad 37,200 53,196 59,148 1.1Maxis Berhad 12,000 83,548 78,600 1.5MISC Berhad 6,100 52,073 53,070 1.0SapuraKencana Petroleum Berhad 10,500 36,587 19,635 0.4Tenaga Nasional Berhad 11,800 96,745 141,600 2.7TIME dotCom Berhad 10,600 43,118 69,536 1.3

145,318 566,014 583,466 11.1 FinanceAlliance Financial Group Berhad 15,100 53,100 50,434 1.0AMMB Holdings Berhad 13,500 88,012 61,425 1.2BIMB Holdings Berhad 17,980 66,007 71,920 1.4Malayan Banking Berhad 13,675 122,911 116,921 2.2Public Bank Berhad 7,000 124,027 122,500 2.3

67,255 454,057 423,200 8.1



Details of financial assets at FVTPL as at 30 September 2015 (Contd.):

Quantity

Aggregate/Amortised


of NAV RM RM %

Quoted equity securities (Contd.)

ConstructionEconpile Holdings Berhad 53,400 57,863 49,929 1.0Gamuda Berhad 29,900 118,801 130,962 2.5Ikhmas Jaya Group Berhad 70,800 47,695 47,436 0.9JAKS Resources Berhad 42,900 36,590 46,761 0.9Mitrajaya Holdings Berhad 86,850 73,948 88,587 1.7Muhibbah Engineering (M) Berhad 27,400 61,843 54,526 1.0Sunway Construction Group Berhad 1,830 2,013 2,123 -

313,080 398,753 420,324 8.0

TechnologyGlobetronics Technology Bhd. 29,200 100,873 181,040 3.5Inari Amertron Berhad 45,300 137,770 153,114 2.9ViTrox Corporation Berhad 20,500 46,579 57,195 1.1

95,000 285,222 391,349 7.5

Industrial productsCoastal Contracts Bhd. 31,600 128,386 58,144 1.1Reach Energy Berhad 90,000 68,175 54,450 1.1SKP Resources Bhd 84,100 114,347 110,171 2.1United U-LI Corporation Berhad 9,400 32,900 38,540 0.7

215,100 343,808 261,305 5.0

Consumer productsHup Seng Industries Berhad 42,900 53,433 51,480 1.0Karex Berhad 34,350 82,300 111,637 2.1NTPM Holdings Berhad 78,500 54,345 56,128 1.1

155,750 190,078 219,245 4.2InfrastructureDiGi.Com Berhad 23,200 106,137 128,760 2.5



Details of financial assets at FVTPL as at 30 September 2015 (Contd.):

Quantity

Aggregate/Amortised


of NAV RM RM %

Quoted equity securities (Contd.)

PropertiesMCT Berhad 31,900 41,036 36,047 0.7Sunway Berhad 18,300 59,649 57,645 1.1Tambun Indah Land Berhad 24,000 40,189 31,200 0.6

74,200 140,874 124,892 2.4

Total quoted equity securities 1,088,903 2,484,943 2,552,541 48.8

Quoted collective investment schemes

Axis Real Estate Investment Trust 52,272 89,464 87,817 1.7MRCB-Quill REIT 47,700 57,240 53,901 1.0Pavilion Real Estate Investment Trust 53,000 73,435 78,970 1.5Total quoted collective investment

schemes 152,972 220,139 220,688 4.2

Unquoted corporate bonds

Cagamas Berhad maturing on 08/08/2018 500,000 514,995 525,539 10.0

Cagamas MBS Berhad maturing on 08/08/2017 320,000 329,719 326,403 6.2

DRB-Hicom Berhad maturing on 30/11/2018 200,000 202,526 201,833 3.9

Golden Assets International Finance Limited maturing on 17/11/2017 500,000 503,176 500,556 9.6

Jati Cakerawala Sdn Bhd maturing on 31/07/2023 100,000 97,190 97,934 1.9

Maybank Islamic Berhad maturing on 31/03/2016 250,000 250,457 250,217 4.8

Sarawak Energy Berhad maturing on 23/06/2016 400,000 406,232 405,581 7.7

Total unquoted corporate bonds 2,270,000 2,304,295 2,308,063 44.1

Total financial assets at FVTPL 5,009,377 5,081,292 97.1

Unrealised gain on financial assets at FVTPL 71,915


5. MANAGER’S FEE

The Manager’s fee is computed on a daily basis at a rate not less than 1.2% per annum and not exceeding 3.0% per annum of the NAV of the Fund as provided under Clause 13(2) of the Deed.

The Manager is currently charging Manager’s fee of 1.55% per annum (financial period from 1 April 2014 to 30 September 2014: 1.55% per annum) of the NAV of the Fund.

6. TRUSTEE’S FEE

Pursuant to the Eighth Supplemental Deed dated 25 July 2014, the Trustee’s fee is computed not exceeding 0.07% per annum of the NAV of the Fund and subject to a minimum fee of RM9,000 effective from 1 August 2014. Prior to 1 August 2014, the Trustee’s fee was computed at a rate not exceeding 0.20% per annum and subject to a minimum fee of RM18,000.

The Trustee’s fee is currently computed based on the minimum fee of RM9,000 per annum effective from 1 August 2014. Prior to 1 August 2014, the Trustee’s fee was computed based on the minimum fee of RM18,000 per annum.

7. INCOME TAX

Income tax is calculated at the Malaysian statutory tax rate of 25% of the estimated assessable income for the financial period. The statutory tax rate will be reduced to 24% effective year of assessment 2016.

Income tax is calculated on investment income less partial deduction for permitted expenses as provided for under Section 63B of the Income Tax Act, 1967.

A reconciliation of income tax expense applicable to net (loss)/income before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Fund is as follows:

1.4.2015 to 30.9.2015

1.4.2014 to 30.9.2014

RM RM

Net (loss)/income before tax (282,100) 225,409

Tax at Malaysian statutory tax rate of 25% (financial period from 1 April 2014 to 30 September 2014: 25%) (70,525) 56,352

Tax effect of:Income not subject to tax (30,826) (169,275)Loss not deductible for tax purposes 86,490 87,231Expenses not deductible for tax purposes 2,745 2,811Restriction on tax deductible expenses for unit trust fund 12,116 22,881Over provision in prior year (8,735) (26,497)

Income tax for the period (8,735) (26,497)


8. SHORT TERM DEPOSITS

Short term deposits are held with licensed financial institutions in Malaysia, on a daily renewal basis at the prevailing interest rate.

9. OTHER RECEIVABLES

30.9.2015 30.9.2014RM RM

Amount due from stockbrokers 37,409 66,643Dividend receivable 10,658 8,551Interest receivable from short term deposits 14 49

48,081 75,243

10. OTHER PAYABLES

30.9.2015 30.9.2014RM RM

Amount due to stockbrokers 52,080 -Accrual for auditors’ remuneration 4,000 3,676Accrual for tax agent’s fees 5,850 5,355Provision for printing and other expenses 10,604 16,582

72,534 25,613

11. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS

NAV attributed to unitholders is represented by:

Note 30.9.2015 30.9.2014RM RM

Unitholders’ contribution (a) 2,766,642 3,662,813Retained earnings:

Realised reserves 2,396,262 2,430,669Unrealised reserves 71,915 633,977

2,468,177 3,064,646

5,234,819 6,727,459


11. NET ASSET VALUE ATTRIBUTABLE TO UNITHOLDERS (CONTD.)

(a) Unitholders’ contribution

1.4.2015 to 30.9.2015 1.4.2014 to 30.9.2014No. of units RM No. of units RM

At beginning of the period 7,112,372 3,433,393 12,952,641 3,772,560Add: Creation of units 107,631 91,086 37,366 32,501Less: Cancellation of units (888,326) (757,514) (5,476,914) (4,844,039)Distribution equalisation - (323) - (93,733)Reclassification of retained

earnings - - - 4,795,524At end of the period 6,331,677 2,766,642 7,513,093 3,662,813

The number of units legally or beneficially held by the Manager, Kenanga Investors Berhad, and parties related to the Manager as at 30 September 2015 were nil (30 September 2014: nil).

12. NET ASSET VALUE PER UNIT

In line with the adoption of MFRS 139, financial assets at FVTPL have been valued at the bid prices at the close of business. In accordance with the Deed, the calculation of NAV attributable to unitholders per unit for the creation and cancellation of units is computed based on financial assets at FVTPL valued at the last done market price.

A reconciliation of NAV attributable to unitholders for creation/cancellation of units and the NAV attributable to unitholders per the financial statements is as follows:

30.9.2015 30.9.2014RM RM/Unit RM RM/Unit

NAV attributable to unitholders for creation/cancellation of units 5,247,812 0.8288 6,734,703 0.8964

Effects of adopting bid prices as fair value (12,993) (0.0020) (7,244) (0.0010)

NAV attributable to unitholders per statement of financial position 5,234,819 0.8268 6,727,459 0.8954

13. PORTFOLIO TURNOVER RATIO (“PTR”)

PTR for the financial period from 1 April 2015 to 30 September 2015 is 0.38 times (financial period from 1 April 2014 to 30 September 2014: 0.35 times).

PTR is the ratio of average acquisitions and disposals of investments of the Fund for the financial period to the average NAV of the Fund, calculated on a daily basis.


14. MANAGEMENT EXPENSE RATIO (“MER”)

MER for the financial period from 1 April 2015 to 30 September 2015 is 1.04% (financial period from 1 April 2014 to 30 September 2014: 1.01%).

MER is the ratio of total fees and recovered expenses of the Fund expressed as a percentage of the Fund’s average NAV, calculated on a daily basis.

15. TRANSACTIONS WITH STOCKBROKING COMPANIES/LICENSED FINANCIAL INSTITUTIONS

Transaction value

Percentage of total

Brokerage, stamp duty

and clearing fee

Percentage of total

RM % RM %

Kenanga Investment Bank Berhad 1,573,068 39.2 3,325 37.1RHB Investment Bank Berhad 816,376 20.3 595 6.6Maybank Investment Bank Berhad 630,448 15.7 2,097 23.4CIMB Investment Bank Berhad 294,728 7.3 1,046 11.7Hong Leong Investment Bank

Berhad 188,097 4.7 660 7.3Alliance Investment Bank Berhad 162,229 4.0 560 6.2Maybank Berhad 152,311 3.8 - -Affin Hwang Investment Bank

Berhad 98,639 2.5 340 3.8UOB Kay Hian Securities (M) Sdn

Bhd 51,846 1.3 178 2.0AmInvestment Bank Berhad 47,703 1.2 168 1.9

4,015,445 100.0 8,969 100.0

* Kenanga Investment Bank Berhad is a related party of Kenanga Investors Berhad.

The above transactions values are in respect of quoted investment securities and unquoted bonds. Transactions in unquoted bonds do not involve any commission or brokerage fees.

The directors of the Manager are of the opinion that the transactions with the related party have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from that obtainable in transactions with unrelated parties. The Manager is of the opinion that the above dealings have been transacted on an arm’s length basis.


16. SEGMENTAL REPORTING

a. Business Segments

In accordance with the objective of the Fund, the Fund can invest around 40% to 60% in quoted investment securities and 40% to 60% in fixed income instruments. The following table provides an analysis of the Fund’s revenue, results, assets and liabilities by business segments:

Quoted investment

securities

Unquoted fixed income instruments

Other investments Total

RM RM RM RM1.4.2015 to 30.9.2015RevenueSegment income (268,914) 42,065 4,194 (222,655)Unallocated expenditure (59,445)Loss before tax (282,100)Income tax 8,735Net loss after tax (273,365)

30.9.2015AssetsFinancial assets at FVTPL 2,773,229 2,308,063 -Short term deposits - - 160,632Other segment assets 48,067 - 14Total segment assets 2,821,296 2,308,063 160,646 5,290,005Unallocated assets 23,097

5,313,102

LiabilitiesTotal segment liabilities 52,080 - - 52,080Unallocated liabilities 26,203

78,283


16. SEGMENTAL REPORTING (CONTD.)

a. Business Segments (Contd.)

Quoted investment

securities

Unquoted fixed income instruments

Other investments Total

RM RM RM RM1.4.2014 to 30.9.2014RevenueSegment income 235,830 75,079 17,268 328,177Unallocated expenditure (102,768)Income before tax 225,409Income tax 26,497Net income after tax 251,906

30.9.2014AssetsFinancial assets at FVTPL 3,839,711 2,279,775 -Short term deposits - - 553,504Other segment assets 75,194 - 49Total segment assets 3,914,905 2,279,775 553,553 6,748,233Unallocated assets 23,093

6,771,326

LiabilitiesUnallocated liabilities 43,867

b. Geographical Segments

As all of the Fund’s investments are located in Malaysia, disclosure by geographical segment is not relevant.

17. FINANCIAL INSTRUMENTS

a. Classification of financial instruments

The Fund’s financial assets and financial liabilities are measured on an ongoing basis at either fair value or at amortised cost based on their respective classification. The significant accounting policies in Note 3 describe how the classes of financial instruments are measured, and how income and expenses, including fair value gains and losses, are recognised.


17. FINANCIAL INSTRUMENTS (CONTD.)

a. Classification of financial instruments (Contd.)

The following table analyses the financial assets and liabilities of the Fund in the statement of financial position by the class of financial instrument to which they are assigned and therefore by the measurement basis.

Financial assets at

FVTPL ReceivablesFinancial liabilities Total

RM RM RM RM30.9.2015AssetsQuoted equity securities 2,552,541 - - 2,552,541Quoted collective investment

schemes 220,688 - - 220,688Unquoted corporate bonds 2,308,063 - - 2,308,063Short term deposits - 160,632 - 160,632Other receivables - 48,081 - 48,081Cash at bank - 8,727 - 8,727

5,081,292 217,440 - 5,298,732

LiabilitiesAmount due to Manager - - 5,009 5,009Amount due to Trustee - - 740 740Other payables - - 72,534 72,534

- - 78,283 78,283

30.9.2014AssetsQuoted equity securities 3,516,932 - - 3,516,932Quoted collective investment

schemes 187,544 - - 187,544Quoted warrants 135,235 - - 135,235Unquoted corporate bonds 2,279,775 - - 2,279,775Short term deposits - 553,504 - 553,504Other receivables - 75,243 - 75,243Cash at bank - 12,139 - 12,139

6,119,486 640,886 - 6,760,372

LiabilitiesAmount due to Manager - - 17,514 17,514Amount due to Trustee - - 740 740Other payables - - 25,613 25,613

- - 43,867 43,867


17. FINANCIAL INSTRUMENTS (CONTD.)

b. Financial instruments that are carried at fair value

The Fund’s financial assets at FVTPL are carried at fair value. The fair values of these financial assets were determined using prices in active markets.

The following table shows the fair value measurements by level of the fair value measurement hierarchy:

Level 1 Level 2 Level 3 TotalRM RM RM RM

Investments:30.9.2015- Quoted equity securities 2,552,541 - - 2,552,541- Quoted collective investment

schemes 220,688 - - 220,688- Unquoted corporate bonds - 2,308,063 - 2,308,063

30.9.2014- Quoted equity securities 3,516,932 - - 3,516,932- Quoted collective investment

schemes 187,544 - - 187,544- Quoted warrants 135,235 - - 135,235- Unquoted corporate bonds - 2,279,775 - 2,279,775

Level 1: Quoted prices in active marketLevel 2: Model with all significant inputs which are observable market dataLevel 3: Model with inputs not based on observable market data

The fair values of quoted equity securities, quoted collective investment schemes and quoted warrants are determined by reference to Bursa Malaysia Securities Berhad’s bid prices at reporting date. The fair values of unquoted corporate bonds are based on average of bid prices quoted by respective financial institutions at reporting date.

c. Financial instruments not carried at fair value and whose carrying amounts are reasonable approximations of fair value

The carrying amounts of the Fund’s other financial assets and liabilities are not carried at fair value but approximate fair values due to the relatively short term maturity of these financial instruments.


18. CAPITAL MANAGEMENT

The capital of the Fund can vary depending on the demand for creation and cancellation of units to the Fund.

The Fund’s objectives for managing capital are:

a. To invest in investments meeting the description, risk exposure and expected return indicated in its prospectus;

b. To maintain sufficient liquidity to meet the expenses of the Fund, and to meet cancellation requests as they arise; and

c. To maintain sufficient fund size to make the operations of the Fund cost-efficient.

No changes were made to the capital management objectives, policies or processes during the current and previous financial periods.

KENANGA INCOME PLUS FUND

INTERIM REPORT

For the Financial Period from 1 April 2015 to 30 September 2015

Investor Services CenterToll Free Line: 1 800 88 3737Fax: +603 2057 3722Email: [email protected]

Head Office, Kuala LumpurSuite 12.02, 12th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.Tel: 03-2057 3688 Fax: 03-2161 8807

Kenanga Investors Berhad (353563-P)

Documents

KENANGA MANAGED GROWTH FUND · For the Financial Period from 1 April 2015 to 30 September 2015 Investor Services Center Toll Free Line: 1 800 88 3737 Fax: +603 2057 3722 Email: [email protected]